FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

Econintersect: North Rhine-Westphalia is the most populous state in Germany. Election results for a new parliament on Sunday (13 May 2012) produced a clear majority for the center left parties (Social Democrats and Greens). The center-right Christian Democratic Union (CDU, the party of Chancellor Angela Merkel) received the lowest vote total it had gotten in the state in 65 years, garnering just 26% of the vote estimated from exit polls and reported by the Financial Times. The outcome is a “crushing defeat” (Reuters) for Merkel and comes from 22% of the German population.

Follow up:

Reuters reported that early projections give the Social Democrats (SPD) 38.9%, CDU 26.3%, Greens (11.8%) and the Free Democrats (FDP) 8.3%. The FDP is a pro-business party that often aligns with the CDU (Reuters), but is called “the liberal party” by Wikipedia. The total for the SPD and the Greens is more than 50% so a coalition of these two parties should control the state parliament.

The New York Times reports that a fifth party, the Pirate Party which focuses on internet usage and other information technology issues, came in fifth with 7.8% of the vote. The totals given by Reuters add to only 93%, which leaves a significant number of votes unaccounted for. According to Wikipedia there is a fifth major political party (not mentioned in the news reports out so far), The Left. It can be assumed that if they received votes the number would be considerably less than the 7.8% mentioned for the Pirate Party. Thus it is likely that much of the 7% missing in the early reports are split between the many smaller parties in Germany and The Left.

A week ago a report by Spiegel outlined where this resurgence of the left is coming from: income inequality. Just as the wages of workers in other countries, such as the U.S. have stagnated over the past decades while total income (and therefore income for the highest income levels) has risen dramatically. From Spiegel:

It's a paradox: At a time when the economic elites in the United States and Great Britain are turning to Germany's recipes for industrial success as role models, the social structure in Germany is increasingly moving in the direction of a three-class society. This is a fundamental shift for a social market economy whose policies have long been aimed at ensuring that the country's prosperity is fairly distributed to all echelons of society. That system now appears to be eroding fast.

These days, it is executives, with their compensation skyrocketing into the millions, who are at the top. The second tier consists of the well-trained and reasonably well-paid legions of white-collar and skilled workers in modern information and industrial societies. Bringing up the rear are professional groups that were once considered part of the core of the traditional working world: salespeople, cooks, waiters and teachers, for example, who often earn less now than they did a decade ago.

The move toward the left follows a similar shift in French elections a week ago that saw the election of Socialist Francois Hollande.

Make
a Comment

Econintersect wants your comments,
data and opinion on the articles posted. As the internet is a
"war zone" of trolls, hackers and spammers - Econintersect must balance its
defences against ease of commenting. We have joined with Livefyre
to manage our comment streams.

To comment, just click the "Sign In" button at the top-left corner of
the comment box below. You can create a commenting account using your
favorite social network such as Twitter, Facebook, Google+, LinkedIn or
Open ID - or open a Livefyre account using your email address.

No feedback yet

Econintersect News Blog

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.